What The Disney and Fortnite Deal Means For The Industry

By Nick Woodford, Content Lead at Anzu.io

In its latest move, Disney has secured a $1.5 billion equity stake in Epic Games this month as its CEO, Bob Iger, continues to announce new plans and partnerships aimed at helping the company continue to innovate, stay relevant, and branch out to secure and grow the company’s future.

On the deal, Iger said: “When I saw Gen Z, and Gen Alpha, and even Millennials, and I saw the amount of time they were spending, in terms of their total media screen time, on video games, it was stunning to me — it was equal to what they spend on TV and movies. And the conclusion I reached was, we have to be there. And we have to be there as soon as we possibly can in a very compelling way.”

Why Disney wants a piece of Fortnite

If you aren’t one of the 500 million people who play Fortnite, it’s important to know that Disney is not new to the platform. Epic Games and Disney have been collaborating for years, with many of its major IPs having already appeared in the game in the form of character skins, accessories, weapons, side quests, or as part of the game’s ongoing storylines.

However, when looking at its plan going forward, it appears that Disney will be building out its own corner of the Fortnite universe. So, what does this mean? Although Fortnite is known as a Battle Royale game, it has evolved into a huge platform full of experiences, similar to Roblox.

When you log in to the current version of Fortnite, you have the option to dive straight into the original Battle Royale mode or try out one of the thousands of different games, most of which have been created by players themselves.

In December, Fortnite took this expansion a step further by announcing three new premium games for the platform: Fortnite Festival (by Harmonix, who is known for the Rock Band games), which hit around 600K concurrent players at its peak, Rocket Racing (by Rocket League creators Psyonix), which peaked at around 800K players, and Lego Fortnite — which, shortly after launching, had more than 2 million players (more than Fortnite’s original Battle Royale mode)!

This deal is a win for both sides because Disney will be able to reach millions of players instantly within an environment that is familiar to them. In turn, Fortnite benefits from more of Disney’s IP on their platform as well as new content for players to keep them coming back.

Zooming out

Disney is clearly keen to capitalize on this success, and it will be interesting to see what approach they take now that they are stakeholders in the platform. However, this is not an isolated trend. If you look across all the biggest media companies in the world, gaming is at the top of many of their agendas.

A few examples that come to mind are Netflix’s push into gaming. The streamer now offers over 70 mobile games and recently announced it’s working on several AAA titles to shift its offering to the next stage, including a number of exclusive games it’s working on with Ubisoft.

Another media giant, Warner Brothers, has also continued leveraging its IPs within the gaming world, most notably with Hogwarts Legacy last year. A AAA title based in the world of Harry Potter, it has sold over 24 million units with a retail sales gross of $1 billion as of December 2023. It has also generated more revenue than any of the original Harry Potter films, making it one of the most popular games of recent years.

With over 3.3 billion gamers, a number that has risen by one billion in just eight years, many of the other biggest media companies in the world, including Apple, Amazon, Meta, and Anzu’s investors, Comcast and Sony, continue to find ways to make gaming a larger part of their businesses be that through acquisitions, investments, innovations in software and hardware, bringing their IPs to the gaming world, or creating film and TV adaptations of well-known video games.

As these media companies continue to look into gaming, the space is only going to keep growing, and in turn, people will spend longer and longer in these immersive virtual worlds. So, where does this leave advertisers?

The advertising angle

Today, in comparison to other media channels, gaming only represents a very small part of the advertising industry. However, as global trends continue to align and fuel the gaming industry, this channel is steadily becoming one of the most important ways for advertisers to connect with their target audiences, with brands from every vertical imaginable looking to gaming to help them make meaningful connections with audiences who are increasingly hard to reach via other entertainment mediums.

If we look at some of the brands making the biggest waves in gaming today (Nike, Adidas, Ralph Lauren, Levi’s, Domino’s, KFC, Pepsi, Coca-Cola, Red Bull, and BMW), most of them are forward-thinking companies that have stood the test of time because they have worked hard to innovate and position themselves at the forefront of popular culture.

Many of them also have an omnichannel approach to gaming, launching campaigns on platforms like Fortnite while bringing their ads to other indie and niche titles to ensure they maximize their reach and don’t miss out on a core section of their target audience.

A great example of a brand that continues to lead in this space is Tommy Hilfiger. Some of the brand’s recent activations include partnering with Roblox to launch a virtual line of their outfits, assembling an esports group called Team Tommy, and creating their own mobile game called FashionVerse, which according to the brand, “leverages AI to enhance 3D looks”. The brand also regularly leverages intrinsic in-game advertising to bring its campaigns to some of the most popular mobile and PC titles to connect with players in a non-intrusive and engaging way.

Gaming and the metaverse aren’t a temporary trend, but a tectonic shift in consumer behavior. For many brands, it may seem daunting to engage on unfamiliar platforms. However, inaction poses a greater risk than experimentation. Advertisers must start now. Study the trends, find strategic partners, and explore the innovative ways gamers are interacting with media – or risk being left behind in a whole new virtual world.

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